Dismissing the appeal of the assessee Court held that ; there  can hardly be disputed that both the appellants have a substantial interest in the borrowing companies. These facts are not disputed. It is, in these facts, that the ITAT, after examining the definition of the word ‘dividend’ in S. 2(22)(e) of the I. T. Act, 1961 as well as the ratio of this Court in the case of Universal Medicare Pvt. Ltd.  came to a finding that since the assessees were shareholders holding more than 10% of the equity shares of the lending company (M/s. MLPL) and also having a substantial interest in the borrowing companies (45% in OFPL and 99% in SHCPL), the conditions as prescribed under S. 2(22)(e) of the I. T. Act, 1961 were satisfied to include the appellants within the ambit of deemed dividend to be taxed in the hands of the appellant – assessee.Court also observed that ,we find that the reasoning given by the ITAT that there cannot be any proportionate addition of deemed dividend taking into consideration the percentage of the shareholding in the borrowing company, does not give rise to any substantial question of law. In the factual matrix before the ITAT, it held that S. 2(22)(e) of the I. T. Act, 1961 does not postulate any such situation. (ITXA No .722of 2015 dt. 10.09.2018.) 

[Click here to download PDF file] http://itatonline.org/archives/wp-content/uploads/Sahir-Sami-Khatib-Deemed-Dividend.pdf